Taiwan's nylon producers in China stated that caprolactam as a raw material failed to improve due to weak downstream demand.
One of China's three largest caprolactam producers, Baling Petrochemical Company, in Yueyang, Hunan, has one of the two 70,000-ton/year production lines, which started operating at 50% in November. Both the DSM Nanjing plant and Sinopec Shijiazhuang plant stopped their respective 160,000 tons/year and 65,000 tons/year plant in December.
Polymer production also declined significantly in November, and PVC production fell 38.7% to 497,000 tons. In addition, high import volumes and falling prices pushed Chinese methanol producers to the edge of survival. As methanol prices fell below US$200/tonne (CFR), a large number of domestic methanol production stagnated. Domestic methanol producers have stated that there is no economic profit at such prices. Many buyers and distributors have imported large quantities of methanol, and it is expected that the import volume of methanol will reach 300,000 tons in December and next January.
Hong Kong chemical industry analysts pointed out that the downstream demand for the chemical market will remain stagnant until the first quarter of 2009. According to data released by the National Bureau of Statistics, exports will decline by 2.2% for the whole year in November, and chemical production will decline by 3.3%.
Pang Xiaoying, chief executive of CMAI (Shanghai) Co., Ltd., said that the deteriorating world economy has caused the chemical industry to enter the downward path of the cycle since the end of 2007, and it is expected that it will not be able to recover growth until 2011.
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